USDA loan-Chase Bank change dificiency as NOT waived on new approval
It will have taken 9 months to get this one closed and it has been littered with issues all along the way. At the last week before we were finally going to close, into holiday weekend, several extensions later, we see that the second approval letter from Chase has the sentence changed to say the seller's dificiency debt would still be owed. It clearly said in the first letter it would be waived. Chase is apparently no longer handling USDA loans. So, this short sale got switched to a new closer/negotiator. We hoped that this was an over sight when she generated the second letter.
However, we were in a panic calling everyone we (myself and listing agent) could think of to help us with our plea that Chase needed to change it back!! We had verbage from the USDA Loss Mitigation Guide to support us, threatening emails from my buyer about his losses if this went to foreclosure after money spent on due diligence, and a threat ready that we would contact the BBB. Not necessary as it turns out.
When the closer finally called back the listing office, 3 days later, they said it was a "canned statement" on there and they would never pursue the dificiency. They would fax a letter to assure the seller. Phewwww! My goodness, people!! Why do banks take years off our lives with this crazy stress!!
Replies to This Discussion
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Permalink Reply by Wendy Rulnick on
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Alison - I would tend to believe Chase. USDA policy, unless it was recently changed, is not to pursue deficiency. Even Bank of America Ginnie Mae USDA approval letters do not state they waive deficiency. You can send the Loss Mit guide to the seller, and have his attorney review, or call USDA to confirm.
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Permalink Reply by Kevin - Greenville, SC on
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I have a fairly recent (August 2012) Chase/USDA Approval Letter that states any remaining deficiency balance will be waived.
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d. Loan
Requirements
for a PreForeclosure Sale
In order for a loan to be considered for a pre-foreclosure sale, the loan
must be in default (delinquent) for more than 30 days at the time the
pre-foreclosure sale is closed.
A borrower who successfully sells the property securing the loan
using the PFS option is relieved of the mortgage obligation. The
borrower shall not be pursued for deficiency judgments by either
the Servicer or the Agency.https://usdalinc.sc.egov.usda.gov/docs/rd/sfh/lossclaim/Loss%20Miti...
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Once again if this is a concern for your Client they may want to consult an Attorney.
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USDA PFS Guidelines are very similar to that of FHA.
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